Operators Look for Efficiency as Protection Against Market Fluctuations

Miners do not control the market. They are dominated by external forces such as the construction industry and metals demand. That is why they must make processes ever more efficient so they can maintain momentum under lower metals prices, just as much as in good times, said Godfrey Walton, President and COO of Endeavour Silver at Mexico Mining Forum 2018 at the Sheraton Maria Isabel hotel in Mexico City on Wednesday.

Walton was joined on the panel by Fernando Alanís, Director General of Industrias Peñoles, who also agreed that mining production is dominated by fluctuations in the construction industry, so it is vital that miners take matters into their own hands. “This applies to every aspect from safety, training, technology and innovation,” he said.

The panel was completed by José Antonio Berlanga, CEO of Telson Resources and Christopher Warwick, Mexico Country Manager of Pan American Silver, and was moderated by Héctor Quezada, Director of Victaulic Mexico.

Warwick stated that efficiency is greatly impacted by human error. With Pan American’s recent expansions at both its Dolores and La Colorada mines, Warwick expected an accident to happen. “There are so many people coming in and out so there is a lot of room for human error,” he said. Nevertheless, the expansions were completed without incident, but shortly afterward, there was a fatal accident in the maintenance department at Dolores.

“This just goes to show that, even in such a slow-moving area, accidents can always happen,” he said. “With an accident like that you need to look and discover what is missing because to do nothing is not an option.”

But he said that, even though La Colorada is now moving into a new dimension of mechanization, there also needs to be a balance between humans and computers. “We were at one stage close to having a full office of computer people who were not aware of what the mine was supposed to do,” he says, highlighting that technology should not simply be implemented for technology’s sake.

Quezada went on to lead the conversation into a focus on new technologies and automation. “In the last few years, it is undeniable that there has been a great deal of investment in human resources and technology to increase efficiency,” he said. Berlanga shared some of the initiatives Telson is implementing in its Campo Morado and Tahuehueto mines to increase efficiency, including a dry tailings facility that allows much more efficient water recovery.

He also discussed energy use, which has become a much more interesting subject for miners since the 2014 Energy Reform. “In both our projects, we have signed agreements to obtain 100 percent of our electric energy from solar sources,” he said. “We think these kinds of initiatives are of the utmost importance.”

Alanís agreed, and underlined Peñoles’ long commitment to taking advantage of renewable energy resources. The Mexican operator, alongside EDP Renovables, installed a 200MW wind farm called Eolica de Coahuila northwest of Saltillo, with a US$350 million investment. “We also analyze how many square meters of water we use for each ton mined, and we constantly look to be more and more efficient,” he said.

Mining is an old industry, and both Walton and Warwick acknowledged that there are some techniques in mines that are hundreds of years old but Walton concluded that technology is not necessarily always the answer to the efficiency question. “If you look at Canadian mines, you see far fewer people in operations,” he says. “But it is undeniable that mines in Mexico are becoming more efficient, despite their high levels of personnel.”